Post on 30-Sep-2020
THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult
your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.
If you have sold or transferred all your securities in DINGYI GROUP INVESTMENT LIMITED, you should
at once hand this circular to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer, or other
agents through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s).
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no
responsibility for the contents of this circular, make no representation as to its accuracy or completeness and
expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole
or any part of the contents of this circular.
DINGYI GROUP INVESTMENT LIMITED鼎億集團投資有限公司
(Incorporated in Bermuda with limited liability)
(Stock Code: 508)
CONNECTED TRANSACTIONEXTENSION OF CLOSING DATE OF
THE SUBSCRIPTION OF THE CONVERTIBLE BONDAND
NOTICE OF SPECIAL GENERAL MEETING
Independent Financial Adviser to the Independent Board Committee and
the Independent Shareholders
A notice convening the special general meeting of the Company (the “SGM”) to be held at 2:00 p.m. on
Thursday, 19 March 2015 at Unit 2708, 27/F., Convention Plaza – Office Tower, 1 Harbour Road, Wan Chai,
Hong Kong is set out on pages 37 to 38 of this circular.
Whether or not you are able to attend and vote at the SGM, you are requested to complete the enclosed form
of proxy in accordance with the instructions printed thereon and return the same to the Company’s Hong Kong
branch share registrar and transfer office, Tricor Standard Limited, at Level 22, Hopewell Centre, 183 Queen’s
Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed
for holding of the SGM or any adjournment thereof (as the case may be). Completion and return of the form of
proxy shall not preclude you from attending and voting in person at the SGM or any adjournment thereof (as
the case may be) should you so wish.
2 March 2015
CONTENTS
– i –
Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . . . 18
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER . . . . . . . . . . . . . . . . . . 20
APPENDIX – GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
NOTICE OF SPECIAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
DEFINITIONS
– 1 –
In this circular, the following expressions have the following meanings unless the context
specifies otherwise:
“associate(s)” has the meaning as ascribed thereto it under the Listing
Rules
“Board” the board of Directors
“Bondholder” the holder of the Convertible Bonds
“Business Day” a day, other than a Saturday, a Sunday and a public holiday,
on which banks are open for general banking business in
Hong Kong and the PRC throughout their normal business
hours
“Bye-laws” the bye-laws of the Company as amended from time to time
“Chairman” the chairman of the Company
“Closing Date” the fifth (5) Business Days after the date on which all
conditions have been fulfilled or waived (as the case
may be) or on such other date as the Company and the
Subscriber may agree in writing
“Closing Price” the price published in the daily quotation sheet published
by the Stock Exchange for such day
“Company” DINGYI GROUP INVESTMENT LIMITED (stock code:
508), a company incorporated in Bermuda with limited
liability and the issued shares of which are listed on the
Main Board of the Stock Exchange
“connected person(s)” has the meaning ascribed to it under the Listing Rules
“Controlling Shareholder(s)” has the meaning ascribed to it under the Listing Rules
“Conversion Date” the date on which the Conversion Rights are exercised in
accordance with the terms and conditions of the Convertible
Bonds
DEFINITIONS
– 2 –
“Conversion Price” the conversion price of the Convertible Bonds, initially
being HK$0.33 per Convers ion Share (subject to
adjustments)
“Conversion Rights” the rights attaching to the Convertible Bonds to convert the
principal amount of the Convertible Bonds or part thereof
into Conversion Shares
“Conversion Share(s)” 1,878,787,878 new Shares (with nominal value of HK$0.01
each) (subject to adjustment) to be allotted and issued
upon exercise of the Conversion Rights attaching to the
Convertible Bonds by the Bondholder(s)
“Convertible Bonds” convertible bonds in a principal amount of HK$620,000,000
convertible into the Conversion Shares
“Current Market Price” in respect of a Share on a particular date, the average of
the Closing Prices for one Share (being a Share carrying
a full entitlement to dividends) for the twenty consecutive
Trading Days ending on and including the Trading Day
immediately preceding such date
“Director(s)” the directors of the Company
“Elemental” Elemental Minerals Limited, an advanced mining
exploration and development company listed on the
Australian Stock Exchange
“Elemental Shares” ordinary shares of Elemental
“Existing Convertible Bonds”
and “Outstanding Existing
Convertible Bonds”
the 2% coupon convertible bonds in the aggregate principal
amount of HK$200 million issued by the Company to
other subscribers, pursuant to the subscription agreements
dated 12 October 2012 and 17 October 2012 (the “Existing
Convertible Bonds”). On 26 June 2013, 454,545,454
Shares have been allotted and issued pursuant to the
exercise of conversion rights attaching to the Existing
Convertible Bonds. The Existing Convertible Bonds
which had not been converted into Shares as at the Latest
Practicable Date are defined as the “Outstanding Existing
Convertible Bonds”
DEFINITIONS
– 3 –
“Extension” extension of the Closing Date to 8 July 2015 (or such later
date as parties thereto may agree)
“Extension Letter” the extension letter dated 8 January 2015 entered into
between the Company and the Subscriber in relation to the
Subscription
“Group” the Company and its subsidiaries
“HK$” Hong Kong dollar(s), the lawful currency of Hong Kong
“Hantang Resources” Hantang Resources Investment Limited(漢唐資源投資有限公司 , a wholly-owned subsidiary of the China-
Africa Development Fund, being a Chinese investment fund
focusing on facilitating Chinese investments in Africa
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
“Independent Shareholders” Shareholders other than the Subscriber, Mr. Li and their
respective associates who are required to abstain from
voting on the resolution(s) to approve, among other things,
the Subscription at the SGM
“Issue Date” being the respective dates (if issued on different dates) of
issue of the Convertible Bonds
“Joint Venture Company” Ease Main L imi ted(逸明有限公司), a company
incorporated in the British Virgin Islands with limited
liability on 7 March 2014 and owned as to 62.5% by the
Company as at the Latest Practicable Date
“JWIL” Joy Well Investments Limited, the 37.5% shareholder of the
Joint Venture Company
“JV Group” the Joint Venture Company and its subsidiaries
“Last Trading Day” 28 June 2013, being the date of the Subscription Agreement
DEFINITIONS
– 4 –
“Latest Practicable Date” 26 February 2015, being the latest practicable date prior
to the printing of this circular for ascertaining certain
information for inclusion in this circular
“Listing Rules” the Rules Governing the Listing of Securities on the Stock
Exchange
“Maturity Date” the date which is 24 months after the Issue Date
“Mr. Li” Mr. Li Kwong Yuk(李光煜先生), the director and
shareholder of Wincon and the executive Director, the
Chairman and the Controlling Shareholder
“New Closing Date” 8 July 2015, or such later date as parties thereto may agree
“PRC” the People’s Republic of China, for the purpose of
this circular, excludes Hong Kong, the Macau Special
Administrative Region of the People’s Republic of China
and Taiwan
“Proposed Issue” the proposed issue of the Convertible Bonds
“RMB” Renminbi, the lawful currency of the PRC
“SFO” the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong)
“SGM” a special general meeting of the Company to be held
to consider and, if thought fit, approve the terms and
conditions under the Extension Letter
“Share(s) ” the ordinary share(s) of HK$0.01 each in the share capital
of the Company
“Shareholder(s)” the holder(s) of the Share(s)
“Stock Exchange” The Stock Exchange of Hong Kong Limited
DEFINITIONS
– 5 –
“Subscriber” or “Wincon” Wincon Capital Investment Limited(永冠資本投資有限公司), the Controlling Shareholder and the subscriber of the
Convertible Bonds
“Subscription” the subscription of the Convertible Bonds by the Subscriber
pursuant to the terms of the Subscription Agreement
“Subscription Agreement” the conditional subscription agreement dated 28 June 2013
entered into between the Company and the Subscriber
in relation to the Subscription as supplemented by the
Extension Letter
“Takeovers Code” The Code on Takeovers and Mergers
“Trading Day” a day when the Stock Exchange is open for dealing
business, provided that if no Closing Price is reported for
one or more consecutive dealing days, such day or days
will be disregarded in any relevant calculation and must be
deemed not have existed when ascertaining any period of
dealing days
“WAML” Wincon Asse t Managemen t L imi t ed , a company
incorporated in the British Virgin Islands, is wholly-owned
by Mr. Li
“%” per cent.
For reference only, amounts in RMB set out in this circular have been converted into HK$
based on an exchange rate of RMB1 = HK$1.26. No representation is made that any amount in
RMB had been or could be converted at the above rate.
LETTER FROM THE BOARD
– 6 –
DINGYI GROUP INVESTMENT LIMITED鼎億集團投資有限公司
(Incorporated in Bermuda with limited liability)
(Stock Code: 508)
Executive Directors:
Mr. LI Kwong Yuk (Chairman)
Mr. SU Xiaonong (Chief Executive Officer)
Mr. CHEUNG Sze Ming
Independent Non-executive Directors:
Mr. SUN Dongsheng
Mr. CHOW Shiu Ki
Mr. CAO Kuangyu
Registered office:
Canon’s Court
22 Victoria Street
Hamilton HM 12
Bermuda
Principal place of business
in Hong Kong:
Unit 2708, 27/F.
Convention Plaza – Office Tower
1 Harbour Road
Wan Chai, Hong Kong
2 March 2015
To the Shareholders
Dear Sir or Madam,
CONNECTED TRANSACTIONEXTENSION OF CLOSING DATE OF
THE SUBSCRIPTION OF THE CONVERTIBLE BONDAND
NOTICE OF SPECIAL GENERAL MEETING
INTRODUCTION
References are made to the announcements of the Company dated 28 June 2013, 24 April
2014, 8 January 2015 and 16 January 2015 and the circular of the Company dated 15 December
2014 in respect of, inter alia, the issue of and the subscription for the Convertible Bonds and the
Extension.
LETTER FROM THE BOARD
– 7 –
On 28 June 2013, the Company as the issuer and Wincon, the Controlling Shareholder as the
Subscriber entered into the Subscription Agreement in respect of the issue of and the subscription
for the Convertible Bonds in the aggregate principal amount of HK$620,000,000. Completion of the
Subscription was originally expected to take place on or before 8 January 2015. On 8 January 2015,
the Company and the Subscriber entered into a letter of extension to extend the Closing Date to the
New Closing Date (i.e. 8 July 2015 or such later date as parties thereto may agree). As at the Latest
Practicable Date, Convertible Bonds in the principal amount of HK$20,000,000 was subscribed by
the Subscriber. The remaining Convertible Bonds in the principal amount of HK$600,000,000 as
contemplated under the Subscription Agreement will be subscribed by the Subscriber on or before
the New Closing Date.
As the completion of the Subscription (of the remaining HK$600,000,000 Convertible
Bonds) will be delayed from the Closing Date to the New Closing Date, it is a material delay in the
completion as contemplated under the Note to Rule 14A.35 of the Listing Rules, and the Company
shall re-comply with the independent shareholders’ approval requirement and all other applicable
Listing Rules’ requirements in compliance with Rules 14A.35 and 14A.36 of the Listing Rules. The
purpose of this circular is to set out the further details of the Extension.
The details of the Extension Letter are as follows:
EXTENSION LETTER
Date
8 January 2015
Parties
The Company, as issuer
Wincon, as subscriber
As at the Latest Practicable Date, the Subscriber, Mr. Li and WAML together held an
aggregate of 1,705,697,530 Shares, representing approximately 51.62% of the total issued share
capital of the Company, and the Subscriber and WAML are wholly and beneficially owned by
Mr. Li. The Subscriber is a connected person of the Company under the Listing Rules.
Subject
The Parties have agreed that the completion of the Subscription Agreement shall take place
on or before the New Closing Date.
LETTER FROM THE BOARD
– 8 –
PRINCIPAL TERMS OF THE CONVERTIBLE BONDS
Save for the Extension, all the provisions of the Subscription Agreement shall continue to
remain in full force and effect, details of which are summarised as below:
Aggregate principal
amount:
The principal amount of the Convertible Bonds shall be
HK$620,000,000 (Convertible Bonds in the principal
amount of HK$20,000,000 was subscr ibed by the
Subscriber on 8 January 2015, and Convertible Bonds in the
principal amount of HK$600,000,000 remain outstanding).
Interest rate: The Convertible Bonds do not carry any interest.
Maturity and
redemption:
Unless previously redeemed, converted, purchased or
cancelled, the Company will on the Maturity Date, redeem
the Convertible Bonds at 100% of its principal amount.
Ranking of the
Convertible Bonds:
The Convertible Bonds constitute general and unsecured
obligations of the Company and rank equally among
themselves and pari passu with all other present and future
unsecured and unsubordinated obligations of the Company.
Ranking of
Conversion Shares:
The Conversion Shares to be issued upon conversion of
the Convertible Bonds shall be fully paid, free and clear
of encumbrances and rank pari passu in all respects with
all other existing Shares outstanding at the registration
date and the Bondholder shall be entitled in respect of its
Conversion Shares to all dividends and other distributions
on the record date of which falls after the registration date
and to such amounts of dividends and other distributions
as provided for under the terms and conditions of the
Convertible Bonds the record date of which falls on or after
the Conversion Date but prior to the registration date.
Conversion Period: A Bondholder may exercise its Conversion Rights subject
as provided in the terms and conditions of the Convertible
Bonds at any time after the Issue Date until the date
which is 24 months after the Issue Date (the “Conversion
Period”). During the Conversion Period, the Bondholder
may convert all or part of the Convertible Bonds in
multiples of HK$10,000,000.
LETTER FROM THE BOARD
– 9 –
Conversion Price: The initial Conversion Price is HK$0.33 per Conversion
Share (subject to adjustments). The number of Conversion
Shares to be issued on exercise of the Conversion Right
shall be determined by dividing the Hong Kong dollar
principal amount (in HK$) of such bond to be converted by
the Conversion Price in effect on the Conversion Date.
The initial Conversion Price is subject to adjustment in
accordance with the terms and conditions of the Convertible
Bonds, including upon the occurrence of an alteration to
the nominal value of the Shares as a result of consolidation,
reclassification or subdivision, capitalisation of profits or
reserves, rights issues of Shares or options over Shares at
less than 70% of the Current Market Price and exercise of
share options under the Company’s share option scheme
resulting in the issue of more than 10% of Shares during
any 12 months’ period. The Company will publish an
announcement upon any adjustment to the Conversion
Price.
Voting rights: Other than meetings of the Bondholders, the Bondholders
will not have any right to attend or vote at any meeting of
the Company by virtue of them being Bondholders, and
until and unless they have converted all or part of their
Convertible Bonds into Shares entitling holders to attend or
vote at the meetings of the Shareholders.
Transfer: The Convertible Bonds are transferable after the Issue
Date and any transfer or exchange of a Convertible Bond
may be effected in denominations of HK$10,000,000.
The Convertible Bonds shall be transferable only to any
associate of the Subscriber, subject to the terms and
conditions of the Convertible Bonds.
Number of Conversion
Shares issuable:
Based on the initial Conversion Price of HK$0.33 per
Conversion Share (subject to adjustment), a total of
1,878,787,878 Conversion Shares will be issued upon full
conversion of the Convertible Bonds of HK$620,000,000
and the aggregate nominal value of the Conversion Shares
to be issued shall be approximately HK$18,787,879.
LETTER FROM THE BOARD
– 10 –
Comparison of
Conversion Price:
The initial Conversion Price of HK$0.33 per Conversion
Share represents:
(i) a discount of approximately 33.20% to the average
Closing Price of the Shares of approximately
HK$0.494 per Share for the last 20 consecutive
Trading Days up to and including the Last Trading
Day;
(ii) a discount of approximately 42.11% to the average
Closing Price of the Shares of approximately
HK$0.57 per Share for the last 10 consecutive
Trading Days up to and including the Last Trading
Day;
(iii) a discount of approximately 43.49% to the average
Closing Price of the Shares of approximately
HK$0.584 per Share for the last 5 consecutive
Trading Days up to and including the Last Trading
Day;
(iv) a discount of approximately 42.11% to the Closing
Price of the Shares of HK$0.57 per Share as quoted
on the Stock Exchange on the Last Trading Day; and
(v) a discount of approximately 29.79% to the Closing
Price of the Shares of HK$0.47 per Share as quoted
on the Latest Practicable Date.
The initial Conversion Price of HK$0.33 per Conversion
Share was determined after arm’s length negotiations
between the Company and the Subscriber with reference
to the average of the Closing Prices for one Share for the
20 consecutive Trading Days up to and including the Last
Trading Day and also the existing controlling stake of the
Subscriber in the Company.
LETTER FROM THE BOARD
– 11 –
The initial Conversion Price was determined having
regard to the Subscriber’s existing controlling stake in
the Company in the sense that the Company and the
Subscriber considered that amongst other funding methods
the Subscription would provide the Company with a way of
fund raising in a less costly and a relatively flexible way as
it (i) does not create any interest payment obligations on the
Group as compared with bank financing (as the Convertible
Bonds are non-interest bearing); and (ii) is less costly and
time-consuming than raising funds by way of rights issue
or open offer; such terms were possible because of the
Subscriber’s existing controlling stake in the Company, and
the Subscriber is willing to contribute a substantial funding
to the Company without requesting any interest return.
Subsequent to the resumption of trading on 15 December
2015 and prior to the Extension on 8 January 2015, the
price of the Shares as quoted on the Stock Exchange kept
falling from the highest HK$0.53 to HK$0.40 (and further
dropped to the lowest price at HK$0.35 on 14 January
2015), the Conversion Price represented a discount ranging
from 17.5% to 37.73% when compared to the previous
range of 33.2% to 43.49%. It is difficult for the Company
to re-negotiate the Conversion Price taking into account
the decreasing trend of the prevailing market price of
the Shares. In view of the decreasing discount of the
Conversion Price, the Board continued to consider that the
Subscription is fair and reasonable and in the interest of the
Shareholders as a whole.
Assuming full conversion of the Convertible Bonds at the
Conversion Price of HK$0.33 per Conversion Share, the
Convertible Bonds will be converted into approximately
1 , 8 7 8 , 7 8 7 , 8 7 8 C o nv e r s i o n S h a r e s , r e p r e s e n t i n g
approximately 56.85% of the existing issued share capital
of the Company and approximately 36.25% of the issued
share capital of the Company as enlarged by the issue of the
Conversion Shares.
LETTER FROM THE BOARD
– 12 –
Formation and
denomination:
The Convertible Bonds will be issued in the registered form
and in denominations of HK$10,000,000 each.
Listing: No application will be made for the listing of, and
permission to deal in, the Convertible Bonds on the Stock
Exchange or any other stock or securities exchange.
Application will be made for the listing of, and permission
to deal in, the Conversion Shares.
Restriction on
Conversion regarding
Public Float:
If the Company believes that it would no longer satisfy the
Stock Exchange’s public shareholding requirement (i.e.
at least 25% public float) under rule 8.08 of the Listing
Rules following a conversion of any Convertible Bonds
(taking into account the automatic conversion or exercise
mechanism with respect to the Convertible Bonds), such
conversion shall be automatically postponed until such time
as the Company is satisfied that such conversion will not
result in any breach by the Company of rule 8.08 of the
Listing Rules.
Restriction on
Conversion regarding
Mandatory Offer
Obligation:
If the Company believes that any conversion (automatic
conversion or otherwise) of the Convertible Bonds will
trigger a mandatory offer obligation under rule 26 of the
Takeovers Code on the part of the Bondholder when it
converts any of the Convertible Bonds, or on the part of
any parties acting in concert with such Bondholder, such
conversion shall be automatically postponed (i) unless and
until a whitewash waiver is obtained in accordance with the
requirement of the Takeovers Code; or (ii) until such time
as the Company is satisfied that such conversion will not
trigger a mandatory offer obligation under rule 26 of the
Takeovers Code.
LETTER FROM THE BOARD
– 13 –
CHANGES IN THE SHAREHOLDING STRUCTURE OF THE COMPANY
The table below sets out the shareholding structure of the Company (i) as at the Latest
Practicable Date; (ii) immediately upon the full conversion of the Convertible Bonds; (iii)
immediately upon full conversion of the Outstanding Existing Convertible Bonds; and (iv)
immediately upon full conversion of the Convertible Bonds and full conversion of the Outstanding
Existing Convertible Bonds, assuming there are no transfers of the Conversion Shares, for
illustration purpose only:
As at the Latest Practicable Date
Immediately upon full conversion of the Convertible Bonds but before conversion of the Outstanding Existing
Convertible Bonds
Immediately upon full conversion of the Outstanding
Existing Convertible Bonds but before conversion of the
Convertible Bonds
Immediately upon full conversion of the Outstanding
Existing Convertible Bonds and the Convertible Bonds
Number
of Shares
Approximate
shareholding
%
Number
of Shares
Approximate
shareholding
%
Number
of Shares
Approximate
shareholding
%
Number
of Shares
Approximate
shareholding
%
Subscriber, Mr. Li and
WAML (Note 1) 1,705,697,530 51.62 3,584,485,408 69.15 1,705,697,530 45.38 3,584,485,408 63.58
Public Other subscribers
(Note 2) 454,545,454 13.75 454,545,454 8.77 909,090,908 24.18 909,090,908 16.12
Other shareholders 1,144,397,640 34.63 1,144,397,640 22.08 1,144,397,640 30.44 1,144,397,640 20.30
Total 3,304,640,624 100.00 5,183,428,502 100.00 3,759,186,078 100.00 5,637,973,956 100.00
Notes:
1. The Subscriber, Wincon, a company incorporated in the British Virgin Islands, and WAML are wholly-
owned by Mr. Li.
2. On 12 October 2012 and 17 October 2012, the Company and other subscribers entered into the subscription
agreements in respect of the issue of and subscription for the Existing Convertible Bonds at the conversion
price of HK$0.22 per Share in the aggregate principal amount of HK$200 million. On 26 June 2013,
454,545,454 Shares has been allotted and issued pursuant to the exercise of conversion rights attaching
to the Existing Convertible Bonds issued on 28 March 2013 and 31 May 2013 in the aggregate principal
amount of HK$100 million. For further information, please refer to the announcements of the Company
dated 12 October 2012, 17 October 2012, 20 November 2012, 31 December 2012, 31 January 2013,
28 March 2013 and 31 May 2013, and the circular issued by the Company dated 2 November 2012,
respectively.
LETTER FROM THE BOARD
– 14 –
INFORMATION ON THE GROUP AND THE SUBSCRIBER
The Company is an investment holding company. The Group is principally engaged in the
business of food and beverages, securities trading business, loan financing and financial leasing.
The Subscriber is an investment holding company. As mentioned above in this circular, the
Subscriber is the Controlling Shareholder and thus a connected person of the Company under the
Listing Rules.
REASONS FOR AND THE BENEFITS OF THE EXTENSION
From the date of the Subscription Agreement up to the original Closing Date (i.e. 8 January
2015) of the Subscription Agreement, it took around 18 months from signing to the completion
of the Subscription, which had affected the Subscriber’s financing plan. As such, the Subscriber
was unable to arrange the full funding of HK$620,000,000 by the original Closing Date. The
Company agreed to the Extension as it is difficult for the Company to raise such substantial
fund of HK$600,000,000 from third party investors through placing or issue of convertible notes
taking into account the long suspension trading record. The Company having considered the
difficulties in arranging another sources of financing and the Extension Period of six month is not
comparatively long (when compared to the long suspension period of the Shares as well as the
prolonged fulfilment of the conditions precedent of the Subscription), and that the Subscriber’s
confirmation that the Subscriber will be capable to obtain the remaining fund of HK$600,000,000
for the subsequent completion on the New Closing Date, the Company concluded not to enforce
the completion of the Subscription on the Closing Date. As the Controlling Shareholder is still
willing to inject such a substantial funding to the Company (despite that the lapse of the proposed
subscription by Hantang Resources) and there is no immediate need of the funding (given the
capital injection to the Joint Venture Company has also been delayed to 3 months afterwards), the
Directors consider that it is in the interests of the Company and the Shareholders to accommodate
such Extension instead of immediate termination of the Subscription just because of the delay in
completion of the Subscription. There will also be additional benefits to the Shareholders in the
short term as the delay in issue of the Convertible Bonds will reduce the negative impact arising
from the issue of the full Convertible Bonds on its balance sheet in the near term.
The Directors are of the view that the entering into the Extension Letter is in the best
interests of the Company and the Shareholders as a whole and that the terms of the Extension Letter
and are and remain to be fair and reasonable.
LETTER FROM THE BOARD
– 15 –
EQUITY FUND RAISING EXERCISE ON ISSUE OF EQUITY SECURITIES BY THE
COMPANY IN THE LAST 12 MONTHS AND USE OF PROCEEDS
Save for the HK$20,000,000 Convertible Bonds being subscribed by the Subscriber on 8
January 2015, the Company had not conducted any equity fund raising activities in the past 12
months from the Latest Practicable Date.
As disclosed in the circular of the Company dated 15 December 2014, the estimated
net proceeds of the issue of Convertible Bonds (after deducting the fees and expenses) will be
approximately HK$619.5 million, the net Conversion Price is equivalent to approximately HK$0.33
per Conversion Share.
The total net proceeds of the issue of Convertible Bonds of approximately HK$619.5 million
are intended to be used as to approximately HK$472.5 million for funding the financing and
financial leasing business of the JV Group, as to approximately HK$60 million for the acquisition
of further Elemental Shares and as to the remaining HK$87 million for other possible future
investments (though not yet identified as at the Latest Practicable Date).
As disclosed in the circular of the Company dated 5 January 2015, the committed second
contribution of RMB125 million (approximately HK$157.5 million) shall be made by the Company
on or before 15 March 2015. The Company’s commitment on the second capital injection into the
Joint Venture Company could be firstly settled by utilizing its cash and/or disposal of some of the
Group’s trading investment without pursuing other financing alternatives which could be difficult
as mentioned above. Such second contribution funding will follow the existing business plan and
is estimated to be utilized by the second quarter of 2015 in order to meet the expected needs of the
operations of the JV Group. Depending on the development of the business of the Joint Venture
Company, and on the basis that there are no material adverse development upon review of the risk
and return by the Company, the Company will discuss with JWIL to arrange for a further capital
contribution of RMB250 million (approximately HK$315 million) by the Company and RMB150
million (approximately HK$189 million) by JWIL in the third or fourth quarter in 2015, in other to
meet the expected needs of the operations of the Group.
As at the Latest Practicable Date, the Group holds around 11.77% shareholding of Elemental
and around 5.8 million share options which may be exercised at AUD0.25 in the next 11 months.
As at the Latest Practicable Date, the HK$20,000,000 had yet to be utilized and would be
utilized as intended.
Based on the timing of the intended use of proceeds as well as the existing available financial
resources of the Group as disclosed above, the Board is of the view that the Extension would not
have any material adverse impact on the Company’s operations and/or its future business plans.
LETTER FROM THE BOARD
– 16 –
LISTING RULE IMPLICATIONS
As at the Latest Practicable Date, the Subscriber, Mr. Li and WAML together held an
aggregate of 1,705,697,530 Shares, representing approximately 51.62% of the total issued share
capital of the Company, and the Subscriber and WAML are wholly and beneficially owned by
Mr. Li, the executive Director, the Chairman and the Controlling Shareholder. The Subscriber is a
connected person of the Company under the Listing Rules and therefore the issue of Convertible
Bonds to the Subscriber constitutes a connected transaction of the Company under Chapter 14A of
the Listing Rules. The Company has obtained the Independent Shareholders’ approval regarding the
Subscription on 31 December 2014.
As the completion of the Subscription (of the remaining HK$600,000,000 Convertible
Bonds) will be delayed from the Closing Date to the New Closing Date, it is a material delay in the
completion as contemplated under the Note to Rule 14A.35 of the Listing Rules, and the Company
shall re-comply with the independent shareholders’ approval requirement and all other applicable
Listing Rules’ requirements in compliance with Rules 14A.35 and 14A.36 of the Listing Rules in
relation to the Extension.
In the event of any further subsequent material delay in the completion of the Subscription,
the Company shall also re-comply with the independent shareholders’ approval requirement and all
other applicable Listing Rules’ requirements in compliance with Rules 14A.35 and 14A.36 of the
Listing Rules in relation to such further extension (if any).
Pursuant to the Listing Rules, the Subscriber and its ultimate beneficial owner, Mr. Li, and
WAML will abstain from voting at the SGM to approve the Extension. To the best of the Directors’
information, belief and knowledge, save for the Subscriber, Mr. Li and their respective associates,
no other Directors or parties have any material interest which is different from other Shareholders
in relation to the Extension.
Save that Mr. Li had abstained from voting on the resolution passed by the Board to approve
the Extension and the transactions contemplated thereunder, no other Directors had to abstain from
voting on the resolutions passed by the Board to approve the same.
The Independent Board Committee, comprising all the independent non-executive Directors,
has been established to advise the Independent Shareholders as to whether the terms of the
Extension Letter are fair and reasonable and whether the Extension are in the interests of the
Company and the Shareholders as a whole.
The Independent Financial Adviser has also been appointed to advise the Independent Board
Committee and the Independent Shareholders in this regard.
LETTER FROM THE BOARD
– 17 –
SGM
The SGM will be held on 2:00 p.m. on Thursday, 19 March 2015 at Unit 2708, 27/F.,
Convention Plaza – Office Tower, 1 Harbour Road, Wan Chai, Hong Kong, during which
resolution(s) will be proposed to the Independent Shareholders to consider, and if thought fit, to
approve the Extension and the transactions contemplated thereunder. Any vote of the Independent
Shareholders at the SGM will be taken by poll.
A notice convening the SGM is set out on pages 37 to 38 of this circular. Whether or not you
are able to attend, please complete and return the enclosed form of proxy in accordance with the
instructions printed thereon as soon as possible and in any event not later than 48 hours before the
time appointed for the holding of such meeting or any adjournment thereof. Completion and return
of the form of proxy will not preclude you from attending and voting in person at such meeting or
any adjournment thereof should you so wish.
RECOMMENDATION
The Directors, including the independent non-executive Directors after considering the
advice of the Independent Financial Adviser consider the Extension is in the interests of the
Company and the Shareholders as a whole.
The Directors, including the independent non-executive Directors, consider the Extension
and the transactions contemplated thereunder are on normal commercial terms and are fair and
reasonable and are in the interests of the Company and the Shareholders as a whole. Accordingly,
the Directors recommend the Independent Shareholders to vote in favour of the resolutions in
respect of the Extension and the transactions contemplated thereunder.
FURTHER INFORMATION
Your attention is drawn to the (1) letter from the Independent Board Committee and (2)
letter of advice from the Independent Financial Adviser set out on pages 20 and 34 of this circular,
respectively, which contains their views and opinions on the Extension and the transactions
contemplated thereunder and also the Appendix of this circular.
Yours faithfully,
For and on behalf of the Board
Dingyi Group Investment Limited
Li Kwong Yuk
Chairman and Executive Director
LETTER FROM THE INDEPENDENT BOARD COMMITTEE
– 18 –
DINGYI GROUP INVESTMENT LIMITED鼎億集團投資有限公司
(Incorporated in Bermuda with limited liability)
(Stock Code: 508)
Independent Board Committee:
Mr. Sun Dongsheng
Mr. Chow Shiu Ki
Mr. Cao Kuangyu
2 March 2015
To the Independent Shareholders
Dear Sir or Madam,
CONNECTED TRANSACTIONEXTENSION OF CLOSING DATE OF
THE SUBSCRIPTION OF THE CONVERTIBLE BOND
We refer to the circular of the Company dated 2 March 2015 (the “Circular”), of which this
letter forms part. Unless specified otherwise, capitalised terms used herein have the same meanings
as those defined in the Circular.
We have been appointed by the Board as members of the Independent Board Committee to
advise you on the Extension Letter. Messis Capital Limited has been appointed as the independent
financial adviser to advise you and us in this regard. Details of their advice, together with the
principal factors and reasons they have taken into consideration in giving such advice, are set out
on pages 20 to 30 of the Circular. Your attention is also drawn to the “Letter from the Board” in the
Circular.
Having considered the terms of the Extension Letter and the advice of Messis Capital
Limited, in particular the principal factors and reasons set out in its letter, we consider that the
terms of the Extension Letter is fair and reasonable and in the interests of the Company and the
Shareholders as a whole and the Extension is on normal commercial terms.
LETTER FROM THE INDEPENDENT BOARD COMMITTEE
– 19 –
Accordingly, we recommend the Independent Shareholders to vote in favour of the resolution
to be proposed at the SGM to approve the Extension.
Yours faithfully,
Mr. Sun Dongsheng
Mr. Chow Shiu Ki
Mr. Cao Kuangyu
Independent Board Committee
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
– 20 –
The following is the full text of the letter from the Independent Financial Adviser which sets
out its advice to the Independent Board Committee and the Independent Shareholders for inclusion
in this circular.
2 March 2015
To: The Independent Board Committee and the Independent Shareholders of
Dingyi Group Investment Limited
Dear Sir/Madam,
CONNECTED TRANSACTIONEXTENSION OF CLOSING DATE OF THE SUBSCRIPTION OF
THE CONVERTIBLE BOND
INTRODUCTION
We refer to our appointment to advise the Independent Board Committee and the
Independent Shareholders in relation to the Extension, details of which are set out in the letter from
the Board (the “Letter from the Board”) contained in the circular of the Company dated 2 March
2015 (the “Circular”), of which this letter forms part. Capitalised terms used in this letter shall
have the same meanings as defined in the Circular unless the context otherwise requires.
On 28 June 2013, the Company as the issuer and Wincon, the Controlling Shareholder as the
Subscriber entered into the Subscription Agreement in respect of the issue of and the subscription
for the Convertible Bonds in the aggregate principal amount of HK$620,000,000. Completion of the
Subscription was originally expected to take place on or before 8 January 2015. On 8 January 2015,
the Company and the Subscriber entered into a letter of extension to extend the Closing Date to the
New Closing Date (i.e. 8 July 2015 or such later date as parties thereto may agree). As at the Latest
Practicable Date, Convertible Bonds in the principal amount of HK$20,000,000 was subscribed by
the Subscriber. The remaining Convertible Bonds in the principal amount of HK$600,000,000 as
contemplated under the Subscription Agreement will be subscribed by the Subscriber on or before
the New Closing Date.
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
– 21 –
As at the Latest Practicable Date, the Subscriber, Mr. Li and WAML together held an
aggregate of 1,705,697,530 Shares, representing approximately 51.62% of the total issued share
capital of the Company. The Subscriber and WAML are wholly and beneficially owned by Mr. Li,
an executive Director, the Chairman and the Controlling Shareholder. The Subscriber is a connected
person of the Company under the Listing Rules and therefore the issue of Convertible Bonds to the
Subscriber constitutes a connected transaction of the Company under Chapter 14A of the Listing
Rules. As requested by the Stock Exchange, the Company will re-comply with the independent
shareholders’ approval requirement and all other applicable Listing Rules’ requirements in
compliance with Rules 14A.35 and 14A.36 of the Listing Rules in relation to the Extension. The
Subscriber and its ultimate beneficial owner, Mr. Li, are required to abstain from voting at the SGM
to approve the Extension.
The Independent Board Committee comprising all independent non-executive Directors has
been formed to advise the Independent Shareholders in respect of the Extension. We, Messis Capital
Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board
Committee and the Independent Shareholders in this respect.
OUR INDEPENDENCE
As at the Latest Practicable Date, we did not have any relationship with or interest in the
Company or any other parties that could reasonably be regarded as relevant to our independence.
In the last two years, we have acted as the independent financial adviser to the Independent Board
Committee and the Independent Shareholders for the following transaction:
Date of the relevant circular
and our letter of advice Nature of the transaction
15 December 2014 Connected transaction proposed issue of
convertible bonds under specific mandate,
re-election of director and notice of special
general mandate
Apart from normal professional fees paid or payable to us in connection with the previous
appointment mentioned above as well as this appointment as the Independent Financial Adviser, no
arrangements exist whereby we had received or will receive any fees or benefits from the Company
or any other parties that could reasonably be regarded as relevant to our independence. Accordingly,
we consider that the aforementioned previous appointment would not affect our independence, and
that we are independent pursuant to Rule 13.84 of the Listing Rules.
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
– 22 –
BASIS OF OUR OPINION AND RECOMMENDATION
In formulating our opinion, we have relied on the statements, information, opinions and
representations contained in the Circular and the information and representations provided to
us by the Directors and the management of the Company. We have assumed that all statements,
information and representations provided by the Directors and the management of the Company, for
which they are solely and wholly responsible, were true and accurate at the time when they were
provided and continue to be so as at the Latest Practicable Date. We have also assumed that all
statements of belief, opinion and expectation made by the Directors in the Circular were reasonably
made after due enquiry and careful consideration. We have no reason to suspect that any material
facts or information has been withheld or to doubt the truth, accuracy and completeness of the
information and facts contained in the Circular, or the reasonableness of the opinions expressed
by the Directors and the management of the Company. We believe that we have been provided
with sufficient information to reach an informed view and to provide a reasonable basis for our
opinion. We have not, however, carried out any independent verification of the information provided
by the Directors and the management of the Company, nor have we conducted an independent
investigation into the business and affairs of the Group.
The Directors jointly and severally accept full responsibility for the accuracy of the
information contained in the Circular and confirm, having made all reasonable enquiries, that to
the best of their knowledge, opinions expressed in the Circular have been arrived at after due and
careful consideration and there are no other facts not contained in the Circular the omission of
which would make any statement in the Circular misleading.
This letter is issued for the information of the Independent Board Committee and the
Independent Shareholders solely in connection with their consideration of the Extension, and except
for its inclusion in the Circular, is not to be quoted or referred to, in whole or in part, nor shall this
letter be used for any other purposes, without our prior written consent.
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
– 23 –
PRINCIPAL FACTORS AND REASONS CONSIDERED
In arriving at our recommendation to the Independent Board Committee and the Independent
Shareholders, we have taken the following principal factors and reasons into consideration:
1. Background of the Extension
On 28 June 2013, the Company as the issuer and Wincon, the Controlling Shareholder
as the Subscriber entered into the Subscription Agreement in respect of the issue of
and the subscription for the Convertible Bonds in the aggregate principal amount of
HK$620,000,000. Completion of the Subscription was originally expected to take place on
or before 8 January 2015. On 8 January 2015, the Convertible Bonds in the principal amount
of HK$20,000,000 was subscribed by the Subscriber. The Subscriber, who was unable to
obtain the whole fund of HK$620,000,000 by the Closing Date as its financing plan had been
affected by the application and the fulfilment of the conditions precedent of the Subscription
(i.e. the approximately 18-month period from the date of the Subscription Agreement up to
the approved date of the previous SGM), entered into an Extension Letter with the Company
to extend the Closing Date to the New Closing Date (i.e. 8 July 2015 or such later date
as parties thereto may agree). The Company accepted the request for the Extension after
considering the difficulties in arranging another sources of financing (to be discussed in ”5.
Indirect cost of the Extension – Cost of alternative financing when a need arises” below) and
the extension period of six months, in which the Directors believed that the Subscriber is
capable to obtain the remaining fund of HK$600,000,000 for the subsequent completion on
the New Closing Date and is not considered to have further delay, is not comparatively long.
The Parties have agreed that the subsequent completion of the Subscription shall take
place on or before the New Closing Date. Save for the Extension, all the provisions of the
Subscription Agreement shall continue to remain in full force and effect.
As the completion of the Subscription (of the remaining HK$600,000,000 Convertible
Bonds) will be delayed from the Closing Date to the New Closing Date, it is a material
delay in the completion as contemplated under the Note to Rule 14A.35 of the Listing Rules,
and the Company shall re-comply with the independent shareholders’ approval requirement
and all other applicable Listing Rules’ requirements in compliance with Rules 14A.35 and
14A.36 of the Listing Rules in relation to the Extension.
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
– 24 –
In the event of or any further subsequent material delay in the completion of the
Subscription, the Company shall also re-comply with the independent shareholders’ approval
requirement and all other applicable Listing Rules’ requirements in compliance with Rules
14A.35 and 14A.36 of the Listing Rules in relation to such further extension (if any).
2. Direct cost of the Extension
We noted that the Convertible Bonds do not carry any interest. The Extension results
in the delay in receiving the interest-free fund of HK$600,000,000 by the Company. As such,
the direct cost of the Extension can be reasonably represented by the interest forgone arising
from the delay in receiving the HK$600,000,000.
We have employed the standard Hong Kong Dollar corporate savings deposit rates
offered by the Hong Kong and Shanghai Banking Corporation Limited (“HSBC”) for the
estimation of the interest forgone. Taking into account the standard corporate savings
deposit rates offered by HSBC, which is 0.0010% per annum for accounts with a balance
of HK$150,000 or above, the remaining Convertible Bonds in the principal amount of
HK$600,000,000 could have brought the Company approximately HK$3,000 as interest
income during the period of Extension. Having taken into account the Group’s total
turnover for its continuing operations of approximately HK$174.2 million as shown in the
Company’s annual report 2014, we consider that the sum of the said forgone interest income
of approximately HK$3,000 is negligible to the Company, and would not have any material
impact on the financial position of the Company.
Taking into account the aforementioned, we consider that the direct cost involved in
the Extension is insignificant.
3. No immediate need for the funding as of the Closing Date
As disclosed in the Company’s circular dated 15 December 2014, the proceeds from
the issue of the Convertible Bonds were intended to be applied (i) as to approximately
76.27% on funding the financing and financial leasing business of the Joint Venture
Company; (ii) approximately 9.68% on acquisition of further Elemental Shares; and (iii)
approximately 14.04% on other possible future investments.
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
– 25 –
We noted from the Company’s announcement dated 21 August 2014 that pursuant to
the terms of the relevant joint venture agreement in relation to the formation of the Joint
Venture Company, the Group shall contribute RMB125,000,000 (equivalent to approximately
HK$157,500,000) in cash into the Joint Venture Company on or before 15 December 2014.
As disclosed in the Company’s announcement dated 24 December 2014, the aforementioned
capital injection has been delayed to three months afterwards (i.e. 15 March 2015). Such
second contribution of funding, as disclosed in the Letter from the Board, will follow
the existing business plan and is estimated to be utilized by the second quarter of 2015
in order to meet the expected needs of the operations of the JV Group. Depending on the
development of the business of the Joint Venture Company, and on the basis that there
are no material adverse development upon review of the risk and return by the Company,
the Company will discuss with JWIL to arrange for a further capital contribution of
RMB250 million (approximately HK$315 million) by the Company and RMB150 million
(approximately HK$189 million) by JWIL in the third or fourth quarter in 2015, in other
to meet the expected needs of the operations of the Group. In view of the timing of the
capital contribution and other capital requirements for the JV Group demonstrated above, the
Directors consider that as of the Closing Date, there was no immediate need for the proceeds
of HK$600,000,000 from the issue of the remaining Convertible Bonds for the fulfilment of
the Company’s commitment on such capital injection.
In regards to the funding on the acquisition of further Elemental Shares and other
possible future investments, as mentioned in the Letter from the Board, the Group hold
approximately 11.77% shareholding in Elemental and approximately 5.8 million share
options as at the Latest Practicable Date, which may be exercised at AUD0.25 in the next 11
months. As further advised by the Directors, there are no specific timetables or requirements
for the Company to make other possible future investments. As such, the Directors also
consider that there was no immediate need for the proceeds of HK$600,000,000 from the
issue of the remaining Convertible Bonds for the acquisition of further Elemental Shares and
other possible future investments.
Based on the foregoing, we concur with the Director’s view that as of the Closing
Date, when the Company and the Subscriber entered into the Extension Letter, there was
no immediate need for the proceeds of HK$600,000,000 from the issue of the remaining
Convertible Bonds by reference to the timing of the Company’s intended use of proceeds.
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
– 26 –
4. Conversion Price
The Extension is in substance a new arrangement of equity fund raising, and we note
that the Company did not take the opportunity to re-negotiate the Conversion Price.
In accessing the reasonableness of the Conversion Price, we have reviewed the
movements in Share prices from 15 December 2014 (i.e. the date of resumption of trading)
to 8 January 2015 (i.e. the date of the Extension Letter) (the “Review Period”). The closing
prices of the Shares as quoted on the Stock Exchange during the Review Period are set out
below:
0.0
0.1
0.2
0.3
0.4
0.5
0.6
daily closing price daily lowest price daily highest price
Shar
e pr
ice
The movements in share prices of the Shares from 15 Dec 2014 to 8 Jan 2015
8/1/2015
6/1/2015
4/1/2015
2/1/2015
31/12/2014
29/12/2014
27/12/2014
25/12/2014
23/12/2014
21/12/2014
19/12/2014
17/12/2014
15/12/2014
Source: The website of the Stock Exchange (www.hkex.com.hk)
As shown in the chart above, we note that the Share price for the Review Period was
trading within a range from the highest price at HK$0.53 to the lowest price at HK$0.40. The
Conversion Price of HK$0.33 per Conversion Share did represent a discount ranging from
17.50% to 37.73% in the Review Period. In view of the above, the Directors consider that
it is difficult for the Company to re-negotiate the Conversion Price. Having considered the
above and the decreasing trend of the prevailing market price of the Shares, we concur with
the Directors’ view that such discount and the Subscription is fair and reasonable and in the
interest of the Shareholder as a whole.
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
– 27 –
5. Indirect cost of the Extension – Cost of alternative financing when a need arises
As previously mentioned in our letter to the Independent Board Committee and the
Independent Shareholders contained in the Company’s circular dated 15 December 2014
regarding the Subscription Agreement, we understand that it is difficult for the Company to
raise such substantial fund of HK$620,000,000 from third party investors through placing
or issue of convertible notes taking into account the long suspension trading record. As
mentioned in our previous letter to the Independent Board Committee and the Independent
Shareholders contained in the Company’s circular dated 15 December 2014 regarding
the Subscription Agreement, the Company had considered alternative financing methods
including, inter alia, application of term loan from financial institutions, issuance of bonds,
and other form of equity financing. However, as it is mentioned again in the Letter from the
Board that, the Company and the Subscriber considered that amongst other funding methods
the Subscription would provide the Company with a way of fund raising in a less costly and
a relatively flexible way as it (i) does not create any interest payment obligations on the
Group as compared with bank financing (as the Convertible Bonds are non-interest bearing);
and (ii) is less costly and time-consuming than raising funds by way of rights issue or open
offer; such terms were possible because of the Subscriber’s existing controlling stake in the
Company, and the Subscriber is willing to contribute a substantial funding to the Company
without requesting any interest return. The Directors considered, and we concurred, that the
issue of the Convertible Bonds is a better financing alternative over other forms of financing.
As mentioned above, the Group shall contribute RMB125,000,000 (equivalent to
approximately HK$157,500,000) in cash into the Joint Venture Company on or before 15
March 2015. As advised by the Directors, for the purpose of such capital contribution into
the Joint Venture Company on or before 15 March 2015, the Group intends to utilize its cash
and bank balances and to dispose of certain of its trading investments for the contribution.
We note from the Company’s annual report for the year ended 31 March 2014 that the
Group’s cash and cash equivalents as at 31 March 2014 amounted to approximately HK$40.7
million. Also, we have obtained and reviewed an extract of the unaudited consolidated
balance sheet of the Group relating to the consolidated cash and bank balances of the Group
as at 31 December 2014, and we noted that, excluding the cash and bank balances held by
the Joint Venture Company, the consolidated cash and bank balances of the Group as at 31
December 2014 amounted to approximately HK$22 million. As advised by the Directors, the
estimated balances immediately after the subscription of HK$20 million of the Convertible
Bonds on 8 January 2015 amounted to approximately HK$42 million.
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
– 28 –
We have also reviewed the Company’s annual report for the year ended 31 March
2014 and note that the Group’s trading investments include its investments in the equity
securities listed in Hong Kong. We also note from the Group’s unaudited consolidated
balance sheet that as at 31 December 2014, the Group’s total investments held for trading
under its current assets amounted to approximately HK$240.2 million.
Based on the above, we consider the Group’s cash and bank balances together with the
proceeds from the disposal of some of its investment securities would be sufficient to fulfil
the Company’s commitment to contribute RMB125 million into the Joint Venture Company
on or before 15 March 2015.
We note that additional costs would be incurred in utilizing the Group’s cash and
bank balances and in disposing of its investment securities for the capital injection to the
Joint Venture Company on or before 15 March 2015 due to the Extension. Such costs
include trading costs to be incurred in connection with the disposal, the potential reduction
in investment return as a result in the reduction in the investment portfolio, and the interest
income forgone as a result of utilizing the Group’s cash and bank balances. Despite so,
having taken into account that:
(i) the trading costs in relation to the disposal of equity securities listed in
Hong Kong are typically low by reference to the commission rate charged by
brokerage firms in Hong Kong as well as other relevant transaction costs, which
in aggregate amounts to less than 0.5% of the transaction value in a typical
transaction;
(ii) the possible effect of the potential reduction in investment return will only be
temporary as the Group will be able to receive HK$600,000,000 from the issue
of the remaining Convertible Bonds by the New Closing Date as a result of the
Extension;
(iii) the possible disposal of the trading investment, which amounted to
approximately HK$240.2 million as at 31 December 2014, alone is sufficient
for fulfilling the Company’s commitment to capital injection of RMB125
million (equivalent to approximately HK$157,500,000) into the Joint Venture
Company on or before 15 March 2015. As discussed in (i) & (ii) above, we
consider that the Extension would have no adverse impact on the Company’s
operations;
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
– 29 –
(iv) the interest income forgone as a result of utilizing the Group’s cash and bank
balances will be relatively low given the prevailing low interest rate offered by
bank in Hong Kong (as also discussed in the section headed “2. Direct cost of
the Extension” above);
(v) the Company’s commitment on the capital injection into the Joint Venture
Company could be fulfilled by utilizing its cash and/or disposal of some of the
Group’s trading investment without pursuing other financing alternatives which
could be difficult as mentioned in our previous letter to the Independent Board
Committee and the Independent Shareholders contained in the Company’s
circular dated 15 December 2014 regarding the Subscription Agreement;
(vi) based on the timing of the intended use of proceeds as discussed in the section
headed “3. No immediate need for the funding as of the Closing Date” above,
and that the short-term financial need of the Company’s commitment on
the capital injection unto the Joint Venture Company could be fulfilled by
utilizing its cash and/or disposal of some of the Group’s trading investment, the
Extension would not have any material adverse impact on the Company’s future
business plans;
(vii) the Controlling Shareholder is still willing to inject such a substantial funding
to the Company, and it is aforementioned that the fund raising of such sizable
sum is difficult; and
(viii) the Convertible Bonds do not carry any interest and would therefore incur no
interest burden on the Group,
we consider that the costs incurred would be outweighed by the benefits of the
Extension. Therefore, we consider that it is in the interests of the Company and the
Shareholders to accommodate such Extension instead of immediate termination of the
Subscription because of the delay in completion of the Subscription.
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
– 30 –
RECOMMENDATION
Having considered that (i) the direct cost involved in the Extension is negligible; (ii) there is
no immediate need for the remaining HK$600,000,000 as of the Closing Date; (iii) the discount in
the Conversion Price and the Subscription is fair and reasonable; (iv) other financing alternatives
available to the Company to raise such substantial fund of HK$600,000,000 is difficult and time-
consuming; and (v) the additional costs that would be incurred in utilizing the Group’s cash and
bank balances and in disposing of its investment securities for the capital injection to the Joint
Venture Company on or before 15 March 2015 due to the Extension are outweighed by the benefits
of the Extension as discussed above, we are of the view that, although it is not in the ordinary
and usual course of business of the Group, the Extension is on normal commercial terms, fair and
reasonable, and in the interests of the Company and the Shareholders as a whole. Accordingly, we
recommend the Independent Shareholders, and the Independent Board Committee to advise the
Independent Shareholders, to vote in favour of the resolution to be proposed at the SGM to approve
the Extension.
Yours faithfully,
For and on behalf of
Messis Capital Limited
Kinson Li
Managing Director
Mr. Kinson Li is a licensed person registered with the SFC and a responsible officer of
Messis Capital Limited to carry out type 1 (dealing in securities) and type 6 (advising on corporate
finance) regulated activities under the SFO and has over 17 years of experience in corporate finance
industry.
APPENDIX GENERAL INFORMATION
– 31 –
1. RESPONSIBILITY STATEMENT
This circular, for which the Directors collectively and individually accept full responsibility,
includes particulars given in compliance with the Listing Rules for the purpose of giving
information with regard to the Company. The Directors, having made all reasonable enquiries,
confirm that to the best of their knowledge and belief the information contained in this circular is
accurate and complete in all material respects and not misleading or deceptive, and there are no
other matters the omission of which would make any statement herein or this circular misleading.
2. DISCLOSURE OF INTERESTS
(a) Interests of Directors
Save as disclosed below, as at the Latest Practicable Date, none of the Directors or
chief executive of the Company and/or any of their respective associates had any interest or
short position in the shares, underlying shares or debentures of the Company or any of its
associated corporations (within the meaning of Part XV of the SFO) (a) which were required
to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part
XV of the SFO (including interests or short positions which they were taken or deemed to
have under such provisions of the SFO); or (b) which were required, pursuant to Section
352 of the SFO, to be entered in the register referred to therein; or (c) which were required,
pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers as
set out in Appendix 10 to the Listing Rules, to be notified to the Company and the Stock
Exchange:
(i) Long position in the Shares and underlying shares of the Company
Name of Director CapacityNumber of
Shares
Number of underlying
Shares Total
Approximate percentage
of the issued share
capital of the Company
(%)
(Note 1)
Mr. Li Interest of controlled
corporation
1,671,857,530
(Note 2)
1,878,787,878
(Note 3)
3,550,645,408 107.44%
Beneficial owner 33,840,000 13,300,000
(Note 4)
47,140,000 1.43%
3,597,785,408 108.87%
APPENDIX GENERAL INFORMATION
– 32 –
Mr. Su Xiaonong Beneficial owner – 23,750,000
(Note 4)
20,000,000
(Note 5)
43,750,000 1.32%
Mr. Cheung Sze Ming Beneficial owner – 7,000,000
(Note 4)
5,000,000
(Note 5)
12,000,000 0.36%
Mr. Sun Dongsheng Beneficial owner – 1,000,000
(Note 6)
1,000,000 0.03%
Mr. Chow Shiu Ki Beneficial owner – 1,000,000
(Note 6)
1,000,000 0.03%
Notes:
1. Based on 3,304,640,624 Shares issued as at 31 January 2015.
2. These 1,671,857,530 Shares comprise (i) 1,662,882,530 Shares held by Wincon; and (ii)
8,975,000 Shares held by WAML, which are wholly-owned by Mr. Li. Pursuant to the SFO,
Mr. Li is deemed to be interested in these Shares. Mr. Li is also a director of Wincon and
WAML.
3. These 1,878,787,878 conversion Shares will be issued and allotted upon full conversion of
the Convertible Bonds in the aggregate principal amount of HK$620,000,000 at the initial
conversion price of HK$0.33.
4. All underlying Shares are share options granted by the Company on 19 April 2013 and
under the share options scheme of the Company at the exercise price of HK$0.375 per
Share.
5. All underlying Shares are share options granted by the Company on 3 February 2015 under
the share options scheme of the Company at the exercise price of HK$0.477 per Share.
6. All underlying shares are share options granted by the Company on 26 April 2013 under
the share options scheme of the Company at the exercise price of HK$0.375 per Share.
Name of Director CapacityNumber of
Shares
Number of underlying
Shares Total
Approximate percentage
of the issued share
capital of the Company
(%)
(Note 1)
APPENDIX GENERAL INFORMATION
– 33 –
(ii) Long positions in the shares of associated corporation:
Associated corporation
Name of Director Capacity
Total number of shares held
Approximate percentage of
total issued share capital
of Wincon(%)
Wincon Mr. Li Kwong Yuk Beneficial owner 1 100%
(b) Persons who have interests or short positions in the Shares or underlying Shares
which is discloseable under Divisions 2 and 3 of Part XV of the SFO
Save as disclosed below, as at the Latest Practicable Date, no person, other than a
Director or chief executive of the Company, had, or were deemed or taken to have interests
or short positions in the Shares or underlying Shares which would fall to be disclosed to the
Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of
the SFO or, who were, directly or indirectly, interested in 10% or more of the nominal value
of any class of share capital carrying rights to vote in all circumstances at general meetings
of any other member of the Group or had any option in respect of such capital:
Long positions in the Shares and underlying shares of the Company:
Name of Shareholder Capacity
Total number of Shares held
Total number of underlying
Shares held Total
Approximate percentage of
the total issued share capital of
the Company (%)
(Note 1)
Wincon (Note 2) Beneficial owner 1,662,882,530 1,878,787,878
(Note 3)
3,541,670,408 107.17%
Mr. Leung Chiu Beneficial owner 120,126,927 229,647,727
(Note 4)
349,774,654 10.58%
Interest of controlled
corporation
6,715,000 – 6,715,000 0.21%
356,489,654 10.79%
Mr. Li Xuan Beneficial owner 227,272,727 2,375,000
(Note 6)
229,647,727 6.95%
Mr. Yang Dongjun Beneficial owner – 229,647,727
(Note 7)
229,647,727 6.95%
APPENDIX GENERAL INFORMATION
– 34 –
Notes:
1. Based on 3,304,640,624 Shares issued as at 31 January 2015.
2. Wincon is wholly-owned by Mr. Li. Under the SFO, Mr. Li was deemed to be interested in these
Shares and the underlying Shares.
3. On 28 June 2013, Wincon entered into a subscription agreement with the Company (the
“Subscription Agreement”) in respect of the issue of and the subscription for the convertible bonds
in a principal amount of HK$620,000,000 and 1,878,787,878 Shares will be allotted and issued
upon full conversion of the Convertible Bonds at a conversion price of HK$0.33 per conversion
share.
4. On 17 October 2012, Mr. Lei Chong entered into a subscription agreement with the Company in
respect of the issue of and subscription for the 2% coupon convertible bonds in a principal amount
of HK$50,000,000 at a conversion price of HK$0.22 per conversion share. On 12 July 2013, Mr.
Lei Chong transferred his right attaching on the 2% coupon convertible bonds to Mr. Leung Chiu.
Upon full conversion of the convertible bonds, a maximum of 227,272,727 Shares will be allotted
and issued. In addition, 2,375,000 underlying Shares are share options granted by the Company on
19 April 2013 under the Scheme at the exercise price of HK$0.375 per Share.
5. These Shares were registered in the name of Luckyhood Limited, which is wholly owned by Mr.
Leung Chiu. Under the SFO, Mr. Leung Chiu was deemed to be interested in these Shares.
6. These 2,375,000 underlying Shares are share options granted by the Company on 19 April 2013
under the share options scheme of the Company at the exercise price of HK$0.375 per Share.
7. On 12 October 2012, Mr. Yang Dongjun entered into a subscription agreement with the Company in
respect of the issue of and subscription for the 2% coupon convertible bonds in a principal amount
of HK$50,000,000 at a conversion price of HK$0.22 per conversion share. Upon full conversion of
the convertible bonds, a maximum of 227,272,727 Shares will be allotted and issued. In addition,
2,375,000 underlying Shares are share options granted by the Company on 19 April 2013 under the
share options scheme of the Company at the exercise price of HK$0.375 per Share.
3. DIRECTORS’ INTERESTS IN ASSETS/CONTRACTS AND OTHER INTERESTS
(i) Save for the Subscription Agreement in which Mr. Li had a material interests, there is
no contract or arrangement entered into by any member of the Group, subsisting as at
the Latest Practicable Date in which any of the Directors is materially interested and
which is significant in relation to the business of the Group as a whole.
(ii) As at the Latest Practicable Date, none of the Directors or their respective associates
had any interest, direct or indirect, in any assets which had been, since 31 March
2014, being the latest published audited financial statements of the Company were
made up, acquired or disposed of by or leased to any member of the Group, or are
proposed to be acquired or disposed of by or leased to any member of the Group.
APPENDIX GENERAL INFORMATION
– 35 –
4. DIRECTORS’ INTERESTS IN COMPETING BUSINESS
As at the Latest Practicable Date, to the best knowledge and belief of the Directors after
having made all reasonable enquiries, none of the Directors and their respective associates were
considered to have any interests in businesses which competed or were likely, either directly or
indirectly, with the businesses of the Group that need to be disclosed pursuant to Rule 8.10 of the
Listing Rules.
5. DIRECTORS’ SERVICE CONTRACTS
As at the Latest Practicable Date, none of the Directors had entered into, or proposed to
enter into, any service contract with the Company or any other member(s) of the Group (excluding
contracts expiring or which may be terminated by the Company within a year without payment of
any compensation (other than statutory compensation)).
6. MATERIAL ADVERSE CHANGE
The Directors are not aware of any material adverse change in the financial or trading
position of the Group since 31 March 2014, the date to which the latest published audited accounts
of the Group were made up.
7. EXPERT AND CONSENT
The following are the qualifications of the professional adviser who has given its opinion or
advice contained in this circular:
Name Qualifications
Messis Capital Limited a licensed corporation to carry out Type 1 (dealing in securities)
and Type 6 (advising on corporate finance) regulated activities
as defined under the SFO
Messis Capital Limited has given and has not withdrawn its written consent to the issue of
this circular with the inclusion of its letter as set out in this circular and references to its name in
the form and context in which they are included.
APPENDIX GENERAL INFORMATION
– 36 –
As at the Latest Practicable Date, Messis Capital Limited was not beneficially interested
in the share capital of any member of the Group and did not have any right, whether legally
enforceable or not, to subscribe for or nominate persons to subscribe for securities of any member
of the Group.
8. LITIGATION
As at the Latest Practicable Date, no member of the Group was engaged in any litigation,
claim or arbitration of material importance and there was no litigation, claim or arbitration of
material importance known to the Directors to be pending or threatened against any member of the
Group.
9. GENERAL
a. The registered office of the Company is at Canon’s Court, 22 Victoria Street, Hamilton
HM 12, Bermuda. The Company’s head office and principal place of business in Hong
Kong is at Unit 2708, 27/F., Convention Plaza – Office Tower, 1 Harbour Road, Wan
Chai, Hong Kong.
b. The company secretary of the Company is CHAN Kwong Leung, Eric. He is an
associate member of both The Institute of Chartered Secretaries and Administrators in
the United Kingdom and The Hong Kong Institute of Chartered Secretaries.
c. The branch share registrar and transfer office of the Company in Hong Kong is Tricor
Standard Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
d. The English texts of this circular shall prevail over their Chinese texts in case of
inconsistencies.
10. DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents are available for inspection during normal business hours
at the principal place of business of the Company in Hong Kong at Unit 2708, 27/F., Convention
Plaza – Office Tower, 1 Harbour Road, Wan Chai, Hong Kong on any business day from the date of
this circular up to and including the date of 19 March 2015:
a. the Subscription Agreement dated 28 June 2013;
b. the terms and conditions of the Convertible Bonds; and
c. the Extension Letter dated 8 January 2015.
NOTICE OF SPECIAL GENERAL MEETING
– 37 –
DINGYI GROUP INVESTMENT LIMITED鼎億集團投資有限公司
(Incorporated in Bermuda with limited liability)
(Stock Code: 508)
NOTICE OF SPECIAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that a special general meeting (the “Meeting”) of DINGYI
GROUP INVESTMENT LIMITED (the “Company”) will be held at 2:00 p.m. on Thursday, 19
March 2015 at Unit 2708, 27/F., Convention Plaza – Office Tower, 1 Harbour Road, Wan Chai,
Hong Kong for the purpose of considering and, if thought fit, passing with or without amendments,
the following resolution as an ordinary resolution:
ORDINARY RESOLUTION
1. “THAT
(a) the Extension Letter dated 8 January 2015 (the “Extension Letter”) entered
into between the Company as the issuer and Wincon Capital Investment Limited
as the subscriber in relation to the delay in the subscription of the convertible
bonds in the aggregate principal amount of HK$600,000,000 (the “Convertible
Bonds”) by the subscriber (details relating to the Extension Letter are set
out in the circular of the Company dated 2 March 2015 and a copy of the
Extension Letter marked “A” and signed by the chairman of the meeting for
identification purpose having been produced to the meeting), and the extension
contemplated thereunder (the “Extension”) be and are hereby approved,
confirmed and ratified;
(b) the Directors be and are hereby authorized to exercise all the powers of the
Company and take all steps as might in their opinion be desirable, necessary
or expedient to give effect to or in connection with the Extension including
without limitation to:
(i) the execution, amendment, delivery, submission and/or implementation
of any further documents or agreements in relation to the Extension
Letter, the issue of the Convertible Bonds; and
NOTICE OF SPECIAL GENERAL MEETING
– 38 –
(ii) the taking of all necessary actions to implement the transactions
contemplated under the Extension Letter PROVIDED THAT such further
documents or agreements will be of administrative nature and ancillary
to the implementation of the Extension.”
By order of the Board
Dingyi Group Investment Limited
Li Kwong Yuk
Chairman and Executive Director
Hong Kong, 2 March 2015
Registered office:
Cannon’s Court
22 Victoria Street
Hamilton HM 12
Bermuda
Principal Place of Business
in Hong Kong:
Unit 2708
27/F., Convention Plaza – Office Tower
1 Harbour Road
Wan Chai, Hong Kong
Notes:
1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint one or, if he holds two or
more Shares, more than one proxy to attend and vote in his stead in accordance with the bye-laws of the Company. A
proxy need not be a member of the Company.
2. Where there are joint registered holders of any Share, any one such persons may vote at the Meeting, either
personally or by proxy, in respect of such Shares as if he were solely entitled thereto; but if more than one of such
joint holders be present at the Meeting personally or by proxy, that one of the said persons so present whose name
stands first on the register of members of the Company in respect of such Shares shall alone be entitled to vote in
respect thereof.
3. In order to be valid, the form of proxy duly completed and signed in accordance with the instructions printed
thereon together with the power of attorney or other authority, if any, under which it is signed or a certified copy
thereof must be delivered to the Company’s Hong Kong branch share registrar and transfer office, Tricor Standard
Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time
appointed for holding of the Meeting or any adjournment thereof.
4. As at the date hereof, the executive Directors are Mr. Li Kwong Yuk (chairman), Mr. Su Xiaonong (chief executive
officer), and Mr. Cheung Sze Ming; and the independent non-executive Directors are Mr. Sun Dongsheng, Mr. Chow
Shiu Ki and Mr. Cao Kuangyu.